Apple has filed a motion to amend its complaint [PDF] to add a claim of violation of the DMCA, among other new and enlarged claims. Here's the proposed Amended Complaint [PDF]. So, not only have all of Psystar's counterclaims been thrown out, but now it faces new claims. But here's the big news. Apple alleges that it believes there are corporations and/or individuals behind Psystar, who may be added as defendants once Apple in discovery finds out who they are. Woah. Here's the new paragraph that made my eyes bug out:

18. On information and belief, persons other than Psystar are involved in Psystar’s
unlawful and improper activities described in this Amended Complaint. The true names or capacities,
whether individual, corporate, or otherwise, of these persons are unknown to Apple. Consequently
they are referred to herein as John Does 1 through 10 (collectively the “John Doe Defendants”). On
information and belief, the John Doe Defendants are various individuals and/or corporations who have
infringed Apple’s intellectual property rights, breached or induced the breach of Apple’s license
agreements and violated state and common law unfair competition laws. Apple will seek leave to
amend this complaint to show the unknown John Doe Defendants’ true names and capacities when
they are ascertained.

So, Apple apparently believes that somebody else is behind Psystar, which might help to explain why a major law firm would take on what seems like a fly-by-night's case; also why Psystar has been so bold in continuing to sell its products. I knew this thing felt funny. As Alice in Wonderland might put it, "It gets interestinger and interestinger.”

Psystar has stipulated, consenting to the relief requested in the motion, so it will now happen and without a hearing. They have no hope of blocking this motion, I think, because it's timely, it's in good faith, and there is no prejudice to Psystar, since it's so early in the litigation and there's plenty of time for discovery. Apple makes all those points. So Psystar stipulated. Here's the full title of the new complaint:

How'd you like to find that in your mailbox? I know. Scary. Here's the first complaint, so you can compare. I see differences in paragraph 12, mentioning Psystar's OpenPro, "seemingly named after Apple's MacPro"; paragraph 13, adding the Psystar product OpenServ 800; inserting new paragraphs 14 and 15 regarding Psystar offering a "restore disk" and instructions, along with technical support, which allows for the installation of Mac OSX on non-Apple hardware, and also mentioning Psystar's plans to offer laptops, computers, servers, and/or hard drives preinstalled with or which will run a "modified, unauthorized version of Mac OS X operating system, including but not limited to a product referred to on Psystar's website as the 'mobile Open Computer'". Paragraph 16, which was 14 in the original complaint, adds, "For the OpenPro,
online commentators have stated that the OpenPro's 'internal [hardware] design is only average
compared with that of a Mac Pro,' and it has been reported that Psystar failed to properly connect the
graphics card."

Paragraph 22 adds more language from the EULA and 23 adds the OpenPro. Paragraph 26 adds: "Mac OS, Mac OS X, Mac OS X version 10.5, and Mac OS X Server, individual files
constituting components of Mac OS, Mac OS X, Mac OS X version 10.5, and Mac OS X Server, as
well as various files constituting components of other Apple software and firmware found on Apple-labeled computers are each original works of authorship created by Apple constituting copyrightable
subject matter (hereafter, 'the Copyrighted Works')."

Paragraphs 34-42 are another new claim, for contributory and induced copyright infringement, and that is followed by the new claim to violation of the DMCA, in paragraphs 43-54:

34. Plaintiff incorporates herein by reference each and every allegation in the preceding
paragraphs.

35. Defendant is aware that its actions as described above infringed and continue to
infringe Apple's copyrights and exclusive rights to create derivative works from, reproduce, display and distribute Apple's copyrighted materials.

36. By offering for sale copies of Apple software to actual and potential purchasers for use
on non-Apple-labeled computers, and by providing services to install, update, and/or modify Apple
software to cause it to operate on non-Apple-labeled computers, Defendant has induced, caused or
materially contributed to the infringing conduct of purchasers.

37. Apple is informed and believes, and on that basis alleges, that Defendant's inducement
of infringement of Apple's copyrights in the Copyrighted Works is, and continues to be, intentional,
willful and in conscious disregard of Apple's rights.

38. Apple is informed and believes, and on that basis alleges, that Defendant has realized
profit by virtue of its inducement of infringement of Apple's copyrights.

39. Apple has sustained economic damage as a result of Defendant's inducement of
infringement of Apple's copyrights in an amount to be proven at trial.

40. Apple is entitled to recover the actual damages it has suffered and/or any profits gained
by Defendant that are attributable to its acts of copyright infringement pursuant to 17 U.S.C. § 504(b).
Alternatively, Apple is entitled to the maximum statutory damages allowed under 17 U.S.C. § 504(c)
based on Defendant's willful acts of copyright infringement. Apple will make its election at the
appropriate time before final judgment is rendered.

46. Defendant has admitted that Apple's Mac OS X normally "will not operate on anything
other than Apple-labeled computer hardware" but that Defendant has "developed [its] own code that
allows it to operate on a non-Apple-labeled computer system" and that such code overrides or gets
around Apple's embedded codes.

47. Apple is informed and believes, and on that basis alleges, that Defendant's "code" is
used to circumvent a technological protection measure since it avoids, bypasses, removes,
descrambles, decrypts, deactivates, or impairs a technological protection measure without Apple's
authority for the purpose of gaining unauthorized access to Apple's Copyrighted Works.

48. Apple is informed and believes, and on that basis alleges, that Defendant has
manufactured, imported, offered to the public, provided or otherwise trafficked a product, device,
component, technology, software, or "code" ("the Circumvention Devices") that are primarily
designed or produced for the purpose of either circumventing Apple's technological protection
measures that effectively control access to Copyrighted Works, or allowing third parties to access
Apple's Copyrighted Works without authorization.

49. Apple is informed and believes that that the Circumvention Devices have only limited
commercially significant purpose or use other than to circumvent a technological protection measure
that effectively controls access to Copyrighted Works, or are marketed by Defendant for use in
circumventing a technological protection measure that effectively controls access to Copyrighted
Works.

50. Apple is informed and believes, and on that basis alleges, that Defendant has realized
profit by virtue of its circumvention of Apple's technological protection measure and trafficking in
circumvention devices.

51. Apple has sustained economic damage as a result of Defendant's circumvention of
technological protection measures and trafficking in the Circumvention Devices in an amount to be
proven at trial.

52. Apple is entitled to recover the actual damages it has suffered and/or any profits gained
by Defendant that are attributable to its circumvention of access controls and trafficking in the
Circumvention Devices pursuant to 17 U.S.C. § 1203(c)(1). Alternatively, Apple is entitled to the
maximum statutory damages allowed under 17 U.S.C. § 1203(c)(2). Apple will make its election at
the appropriate time before final judgment is rendered.

53. Pursuant to 17 U.S.C. § 1203(b), Apple is entitled to an injunction against Defendant's
continuing circumvention of access controls and trafficking in the Circumvention Devices.

54. Apple is further entitled to recover its full costs and reasonable attorneys' fees pursuant
to 17 U.S.C. § 1203(b).

Next, they add the following language to their original breach of contract claim:

G. Redistributing Mac OS X software in a form in which the software or portions
of it have been modified or replaced;

H. Transferring copies of Mac OS X and updates thereto separately;

I. Continuing to use and failing to destroy all copies, full or partial, of the
software, after termination of the Software Licenses Agreement for Mac OS X upon automatic
termination without notice as a result of the breaches described in A-H above.

Then, in the next claim, Apple tacks on this sentence: "Apple further seeks punitive damages and injunctive relief as a result of
Psystar’s inducement of others to breach Apple’s License Agreement." Finally, in its Sixth Claim for Relief, on trademark infringement under 15 U.S.C. Section 1114, Apples adds one registered trademark to the list, for SuperDrive®. Obviously, all these changes mean what relief Apple is asking the court for has changed also, and now in the list we also find these added, in some cases adding language to what was claimed before, but in most cases adding entirely new relief requested:

2. Awarding Apple a preliminary and/or permanent injunction against the sale or
distribution of any software or device, including but not limited to the Psystar Open Computer,
OpenPro computer, and OpenServ server products, that allows for the installation or running of Apple
software on non-Apple computers, and requiring Psystar to recall all such products and software sold
or distributed to the public as a result of Psystar's infringement of Apple's copyrights;

3. Awarding Apple actual damages and/or any profits gained by defendants and/or
statutory damages for circumvention of an access control measure and/or trafficking in circumvention
devices as determined at trial;

4. Awarding Apple a preliminary and/or permanent injunction against the sale or
distribution of any software or device, including but not limited to the Psystar Open Computer,
OpenPro computer, and OpenServ server products, that allows forn the installation or running of
Apple Software on non-Apple computers, and requiring Psystar to recall all such products and
software sold or distributed to the public as a result of Psystar's circumvention of an access control
measure and/or trafficking in circumvention devices; ...

6. Awarding damages, including punitive damages, as a result of Psystar's inducement of
others to breach Apple's Software License Agreement for Mac OS X and Mac OS X Server;

10. Awarding Apple a preliminary and/or permanent injunction against sales of the Psystar
Open Computer, OpenPro computer, and OpenServ server products with Apple software and requiring
Psystar to recall all such products sold to the public as a result of Psystar's infringement of Apple's
trademarks and trade dress;

11. Awarding Apple a preliminary and/or permanent injunction against sales of the Psystar
Open Computer, OpenPro computer, and OpenServ server products with Apple software and
requiring Psystar to recall all such products sold to the public as a result of Psystar's dilution of
Apple's trademarks;

12. Awarding Apple a preliminary and/or permanent injunction against sales of the Psystar
Open Computer, OpenPro computer, and OpenServ server products with Apple software and
requiring Psystar to recall all such products sold to the public as a result of its statutory and common
law unfair competition;

The part about the injunctions is interesting because originally Apple was only asking for a permanent injunction. It has added the phrase "preliminary and/or permanent injunction." I assume that means they are at least planning on perhaps asking for a preliminary injunction.

I guess the moral of this story is don't mess with Apple's legal rights, because they will most likely fight to the death, scratching, kicking, whateve... But you know what? Psystar asked for it. And that's why there is another moral to this story. Don't be stupid. Human history has amply demonstrated that it doesn't usually pay.

So, with Apple claiming some entity or individuals are behind Psystar, it looks like the case just got bigger and a lot more interesting.

Psystar's only hope now is that it is not guilty. Well. It's a little late to think of that. I guess they can hope the judge has been reading The Merchant of Venice. As for any corporations or individuals behind Psystar, I think we can assume that they will be trying not to be found in discovery, because if they are, Apple clearly would like to expose them publicly. Not to mention the jugular.

Here's the motion to amend, followed by the proposed Amended Complaint, as text.

PLEASE TAKE NOTICE that on January 8, 2009, at 8:00 a.m., or as soon thereafter as the
matter can be heard, in the courtroom of the Honorable William Alsup, located at 450 Golden Gate
Avenue, San Francisco, California 94102, plaintiff, Apple Inc. ("Apple") will, and hereby does, move
for an order granting Apple leave to file its Amended Complaint and ordering that the Amended
Complaint submitted with this motion be deemed filed.

The motion will be based on this Notice of Motion and Motion, the Memorandum of Points
and Authorities, Apple's Amended Complaint, and the [Proposed] Order filed herewith, on all of the

files and records of this action, and on any additional material that may be elicited at the hearing of
this motion.

MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION

Through this motion, Apple seeks leave to file its Amended Complaint pursuant to Federal
Rule of Civil Procedure 15(a) and this Court's November 7, 2008 Case Management Order. Apple's
Amended Complaint, attached hereto as Exhibit A, adds a Digital Millennium Copyright Act claim,
additional factual allegations relating to Apple's previously asserted claims and Doe defendants. The
DMCA claim is based on new information that Apple has learned since the filing of its original
complaint. Apple's Amended Complaint is timely, does not cause any prejudice to Psystar and should
be permitted.

II. STATEMENT OF FACTS

Apple filed this lawsuit on July 3, 2008. Psystar Corporation ("Psystar") answered on August
28, 2008. In the Case Management Statement, filed October 30, 2008, the parties agreed to a deadline
of January 19, 2009 to amend pleadings. This Court's November 7, 2008 Case Management Order
required that the parties seek leave to amend the pleadings to add claims or parties by November 30,
2008. Since filing the complaint, Apple has discovered additional information necessitating the filing
of this Amended Complaint. Apple's counsel contacted Psystar's counsel to seek Psystar's written
consent to the amendment pursuant to Federal Rule of Civil Procedure 15. However, Psystar has not
2 consented to the filing of this Amended Complaint as of the time of this filing. Accordingly, Apple
seeks an order permitting Apple to file the proposed Amended Complaint.

III. ARGUMENT

A. Leave Should Be Granted To Amend the Complaint.

1. Leave Is Freely Granted.

Federal Rule of Civil Procedure 15(a) provides that leave to amend a pleading "shall be freely
given when justice so requires." The United States Supreme Court, the Ninth Circuit, and this Court
have repeatedly reaffirmed that leave to amend is to be granted with "extreme liberality." DCD
Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987) (citation omitted); see, e.g., Foman v.

Apple's Amended Complaint is timely and should be allowed. In its Case Management Order,
this Court permitted the parties to seek leave to amend to add new claims and/or parties until
November 30, 2008. This motion is being filed prior to that deadline. Furthermore, Apple falls well
within the liberal standard for freely allowing the amendment of pleadings. SeeFoman v. Davis, 371
U.S. 178, 182 (1962) ("In the absence of . . . undue delay, bad faith or dilatory motive on the part of
the movant . . . undue prejudice to the opposing party by virtue of allowance of the amendment . . .
the leave sought should, as the rules require, be 'freely given.'")

There is no prejudice to Psystar here. In the parties' Case Management Conference Statement,
Psystar stipulated to a January 19, 2009 deadline for amendment of the pleadings. Additionally,
Apple's Amended Complaint does not change the nature of the lawsuit, nor is Psystar precluded from
seeking discovery in relation to the Amended Complaint. The deadline to complete discovery in this
case is not until June 26, 2009. Indeed, Psystar just served its first set of discovery today.
Accordingly, Psystar will not be prejudiced by an order granting leave to file Apple's Amended
Complaint.

3

Moreover, Apple offers its Amended Complaint in good faith and without undue delay. Since
filing its original complaint, Apple has discovered new information regarding Psystar's products and
marketing. This information supports Apple's new claim under the Digital Millennium Copyright Act
as well as Apple's assertion of additional details in support of its previously asserted claims. See
Coilcraft, Inc. v. Inductor Warehouse, 2000 U.S. Dist. LEXIS 6097, *8-9 (no bad faith where plaintiff
made "reasonable inquiry" into facts supporting new claim, introduced relevant evidence, and "has
never mischaracterized the nature of the lawsuit").

In sum, Apple's Amended Complaint was filed timely and in good faith, contains claims
similar to those originally asserted and does not prejudice Psystar. Consequently, none of the factors
on which courts base denial of motions for leave to amend are present here. Thus, Apple's motion for
leave should be granted.

IV. CONCLUSION

For the reasons discussed above, plaintiff respectfully seeks leave of this Court to file the
proposed Amended Complaint.

1. Apple is a California corporation with its headquarters and principal place of business
at 1 Infinite Loop, Cupertino, California. Apple makes and sells well-known computer hardware,
software and consumer products and services including the Macintosh® computer, the iPod® music
player and the iPhoneTM. Founded in 1976, Apple has been consistently ranked as one of the most
innovative companies in the world. Apple currently employs approximately 28,000 people

1

worldwide, owns and operates over 200 retail stores, and sells its products online as well. In 2008,
Fortune Magazine named Apple "America's Most Admired Company."

2. A pioneer of the personal computer revolution, Apple launched its Macintosh line of
computers in 1984. Apple's Macintosh computers (or "Mac") introduced such novel innovations as
the mouse, computer icons and the graphical user interface. Apple's "perennially praised" Mac® line
of computers includes the Mac Pro®, iMac®, Mac® mini, MacBook®, MacBook Pro and MacBook
Air®. Since 2001, Apple has sold more than 29 million Macintosh computers.

3. Apple's Macintosh computers are famous for their reliability, ease-of-use and
innovative industrial design. Apple's development teams have seamlessly integrated the hardware and
software features of Macintosh computers such that the use of the computers is intuitive, efficient and
pleasurable. Moreover, the unified, integrated Mac system is simpler to service, update and maintain.
Indeed, for eight consecutive years Consumer Reports has ranked Apple's technical support for its
customers best in the nation for both desktop and laptop computers, surpassing Dell, Hewlett-Packard,
Sony, Toshiba, Gateway and Lenovo.

4. In 2001, Apple launched the tenth generation of its operating system - Mac OS X. Mac
OS X revolutionized operating system architecture, adding extraordinary capabilities, speed and
stability. Apple's most recent version of Mac OS X, version 10.5, known as "Leopard®," has been
described by reviewers as "visually stunning," "powerful, polished and carefully conceived," and
"elegant." Other reviewers have said the "grace of Leopard's interface elements makes productivity
more pleasurable with a Mac," all the result "of years of hard, diligent work by the development teams
at Apple."

5. The Mac OS X user interface combines the use of color, transparency and animation
together with the overall arrangement and set up of various icons in a unique and creative manner. In
addition, the Finder toolbar containing the famous Apple mark is combined with a distinctive three-dimensional applications bar (or "dock") on which various icons reside. The distinctive nonfunctional
combination of elements that makes up the Mac OS X user interface is well known to consumers and
has become associated with Apple and Mac OS X Leopard. This combination of elements shall be
referred to hereafter as "Apple's Trade Dress."

2

6. Mac OS X, including the Leopard® version, has been the subject of numerous articles
in general circulation newspapers, magazines and online publications, as well as radio, television and
Internet broadcasts. The product has received significant acclaim and in recent years sales of Mac
computers have surged, growing at a faster pace than the personal computer market in general.

7. Apple also manufactures and sells the Xserve® rack-mount server for use in businesses
needing to connect multiple computers to a single server. The Xserve uses Mac OS X Leopard Server
as its operating system software. Mac OS X Leopard Server has also been the subject of numerous
articles, publications and media coverage both on television and radio and on the Internet.

8. The Apple brand, including its registered trademarks Apple® and Mac®, is one of the
most famous brands in the world. Since inception, Apple has continuously and extensively promoted,
offered and sold its Mac computers, and its related goods and services, in interstate commerce under
the various Apple and Mac trademarks. Since 1994, Apple has spent more than $3 billion to promote
its brand, including the Apple and Mac trademarks. Apple's brand, including its various marks and
distinctive trade dress, have become synonymous with high quality, innovative, elegant and user-friendly consumer electronics products. Indeed, among many other accolades over the years, for each
of the past three years BusinessWeek Magazine named Apple the "World's Most Innovative
Company." The Apple brand and trademarks consistently are ranked by independent research
organizations as being among the fifty most valuable brands on earth.

9. As a result of Apple's continuous and extensive use and promotion, the consuming
public nationwide understands that Apple's various marks and distinctive trade dress identify Apple's
goods and services, and associates the marks with Apple exclusively. Because of the consistent
quality of Apple's goods and services marketed under and in association with Apple's trademarks and
distinctive trade dress, Apple has established considerable good will and reputation with respect to its
goods and services.

10. Apple's use of its Apple, Mac, Leopard, Xserve and SuperDrive marks has been
exclusive and continuous in the computer industry since long prior to the date of Defendant's first
infringing acts described below. Furthermore, the Apple marks and distinctive trade dress became
famous among the general consuming public long before the date of Defendant's first infringing use.

3

The various Apple marks and distinctive trade dress are well known and are among the most important
assets of Apple.

11. On information and belief, Defendant Psystar Corporation ("Psystar" or "Defendant") is
a corporation organized and existing under the laws of the State of Florida with its principal place of
business at 10475 NW 28th Street, Doral, Florida 33172.

12. In April, 2008, without authorization from Apple, and in violation of the terms of the
Software License Agreement governing the use of Mac OS X software and Apple's intellectual
property, Psystar began selling in commerce a computer named the OpenMac which apparently runs a
modified, unauthorized, version of the Leopard operating system as well as modified and unauthorized
versions of other Apple software and firmware. Thereafter Psystar changed the name of its product to
Open Computer, but continued to sell it with the Leopard operating system, without authorization
from Apple. Psystar also began selling another computer model, the OpenPro, seemingly named after
Apple's Mac Pro®, without authorization from Apple, and in violation of the terms of the Software
License Agreement governing the use of Mac OS X software and Apple's intellectual property. Like
the Open Computer, the OpenPro apparently runs a modified, unauthorized, version of the Leopard
operating system as well as modified and unauthorized versions of other Apple software and
firmware. Psystar sells its computers online and ships them throughout the United States, including
into the Northern District of California. Psystar's Chief Executive Officer has been quoted as saying
that Psystar has sold "thousands" of these computers. In addition, without Apple's permission or
consent, Psystar makes copies of, and offers to customers for download from its website,
www.psystar.com, "updates" to the Leopard software that are either direct copies of Apple-generated
updates and/or unauthorized modified versions of software updates from Apple.

13. In June, 2008, Psystar began selling in commerce rack-mount servers called the
OpenServ 1100 and OpenServ 2400. Subsequently, in October, 2008, Psystar added yet another
server, the OpenServ 800, to its line of products and began selling it in commerce. Without
authorization from Apple, and in violation of the terms of the Software License Agreement governing
the use of the Mac OS X Leopard Server software and Apple's intellectual property, Psystar has
offered for sale and, on information and belief, sold OpenServ 800, OpenServ 1100 and OpenServ

4

2400 servers utilizing the Mac OS X Leopard Server software.
14. In August, 2008, without authorization from Apple, Psystar began distributing a
"restore disk" which allows for the installation of Mac OS X, in violation of the terms of the Software
License Agreement governing the use of Mac OS X software and Apple's intellectual property. On
information and belief, without authorization from Apple, Psystar intentionally provides specific
instructions to its customers that allow customers to install Mac OS X software on non-Apple-labeled
hardware, in violation of the terms of the Software License Agreement. On information and belief,
Psystar also provides technical support and assists its customers to install Mac OS X software in
violation of the terms of the Software License Agreement.

15. On information and belief, in fall 2008, Psystar worked to develop a laptop product that
runs Mac OS X and in October, 2008, Psystar announced that it is planning to sell in commerce
additional computers, servers, laptops, and/or hard drives that are preinstalled with or which will run a
modified, unauthorized, version of Mac OS X operating system, including but not limited to a product
referred to on Psystar's website as the "mobile Open Computer."

16. Online commentators have reported that Psystar's Open Computer is "missing stuff like
iLife, Bluetooth, an IR receiver, DVD burning and the ability to update your computer," is "LOUD,
Crazy Loud," it "breaks the OS' automatic updates," and that "video was DOA right out of the box.
No signal going to monitor. Boot up is moot point as there is nothing to see." For the OpenPro,
online commentators have stated that the OpenPro's "internal [hardware] design is only average
compared with that of a Mac Pro," and it has been reported that Psystar failed to properly connect the
graphics card. Of Psystar itself reviewers have written, "they have no quality control," "lousy tech
support," and "All I want to do is return the computer and get a refund." Likewise, it has been
reported that Psystar has repeatedly changed locations, that its office could not be found, and that its
first on-line payment processor terminated Psystar's account.

17. As alleged more fully below, by misappropriating Apple's proprietary software and
intellectual property for its own use, Psystar's actions harm consumers by selling to them a poor
product that is advertised and promoted in a manner that falsely and unfairly implies an affiliation
with Apple. Psystar's actions also have caused, and are causing, harm to Apple and constitute a

5

misuse of Apple's intellectual property. To prevent this continued unfair and unlawful exploitation of
Apple's proprietary technology, and to avoid further consumer confusion and injury, Apple seeks an
injunction against further misappropriation and infringement of its intellectual property, an award of
damages, treble damages and its attorneys' fees and costs of suit.

18. On information and belief, persons other than Psystar are involved in Psystar's
unlawful and improper activities described in this Amended Complaint. The true names or capacities,
whether individual, corporate, or otherwise, of these persons are unknown to Apple. Consequently
they are referred to herein as John Does 1 through 10 (collectively the "John Doe Defendants"). On
information and belief, the John Doe Defendants are various individuals and/or corporations who have
infringed Apple's intellectual property rights, breached or induced the breach of Apple's license
agreements and violated state and common law unfair competition laws. Apple will seek leave to
amend this complaint to show the unknown John Doe Defendants' true names and capacities when
they are ascertained.

JURISDICTION AND VENUE

19. This Court has subject matter jurisdiction pursuant to 28 U.S.C. sections 1331, 1332,
and 1338 because this action arises under the copyright and trademark laws of the United States, there
17 is complete diversity of citizenship between the parties, and the amount in controversy exceeds
$75,000.

20. Venue is proper in this judicial district pursuant to 28 U.S.C. section 1391 because
Psystar has done business in this judicial district, has committed acts of copyright and trademark
infringement in this district, has breached a contract with a substantial impact in this district, has
engaged in unfair competition in this district, and continues to commit such acts in this district.
Because this is an Intellectual Property case, it is not subject to the intra-District venue provisions of
Northern District of California Local Rule 3-2(c).

GENERAL ALLEGATIONS

21. Apple licenses the use of its Macintosh operating system ("Mac OS") software for use
only on Apple-labeled hardware. Indeed, an original version of the Mac OS is available only with the
purchase of a Macintosh computer. Upgrades to the Mac OS may be licensed separately, but the

6

terms of the license prohibit use of the Mac OS or its upgrades on non-Apple hardware.
22. The Software License Agreement for Mac OS X Leopard (and Mac OS X Leopard
Server) ("License Agreement") provided with each version of Mac OS X Leopard and Mac OS X
Leopard Server are attached hereto as Exhibits 1 and 2, and are incorporated herein by reference. The
Mac OS X Leopard License Agreement specifies inter alia,:

"1. General. The software (including Boot ROM Code)... accompanying
this License whether preinstalled on Apple-labeled hardware, on disk, in
read only memory, or any other media or in any other form (collectively,
the "Apple Software") are licensed, not sold, to you by Apple Inc.
("Apple") for use only under the terms of this License, and Apple reserves
all rights not expressly granted to you....

2. Permitted License Uses and Restrictions.

A. Single Use. This license allows you to install, use and run one (1)
copy of the Apple Software on a single Apple-labeled computer at a time.
You agree not to install, use, or run the Apple Software on any non-Apple-labeled computer or enable another to do so.

* * *

C. You may make one copy of the Apple Software (excluding the Boot
ROM code and other Apple firmware that is embedded or otherwise
contained in Apple-labeled hardware) in machine-readable form for
backup purposes only....Apple Boot ROM code and firmware is provided
only for use on Apple-labeled hardware and you may not copy, modify or
redistribute the Apple Boot ROM code or firmware, or any portions
thereof....

D. Certain components of the Apple Software, and third party open
source programs included with the Apple Software, have been or may be
made available by Apple on its Open Source web site
(http://www.opensource.apple.com/) (collectively the "Open-Sourced
Components"). You may modify or replace only these Open-Sourced
Components; provided that: (i) the resultant modified Apple Software is
used, in place of the unmodified Apple Software, on a single Apple
labeled computer; and (ii) you otherwise comply with the terms of this
License and any applicable licensing terms governing use of the Open-Sourced Components.

* * *

F. Except as and only to the extent permitted by applicable licensing
terms governing use of the Open-Sourced Components, or by applicable
law, you may not copy, decompile, reverse engineer, disassemble, modify,
or create derivative works of the Apple Software or any part thereof.

* * *

3. Transfer. You may not rent, lease, lend, redistribute or sublicense the
Apple Software. Subject to the restrictions set forth below, you may,

7

however, make a one-time permanent transfer of all of your license rights
to the Apple Software (in its original form as provided by Apple) to
another party, provided that: (a) the transfer must include all of the Apple
Software, including all its component parts (excluding Apple Boot ROM
code and firmware), original media, printed materials and this License; (b)
you do not retain any copies of the Apple Software, full or partial,
including copies stored on a computer or other storage device; and (c) the
party receiving the Apple Software reads and agrees to accept the terms
and conditions of this License. You may not rent, lease, lend, redistribute,
sublicense or transfer any Apple Software that has been modified or
replaced under Section 2D above....

Updates: If an Apple Software update completely replaces (full install) a
previously licensed version of the Apple Software, you may not use both
versions of the Apple Software at the same time nor may you transfer
them separately.

* * *

5. Termination. This License is effective until terminated. Your rights under this License will terminate automatically without notice from Apple if you fail to comply with any term(s) of this License. Upon the termination of this License, you shall cease all use of the Apple Software and destroy all copies, full or partial, of the Apple Software."

The Mac OS X Leopard Server License Agreement includes essentially the same terms.

23. Psystar claims the "Open Computer is PC that works just like a Mac with Apple's latest operating system OS X 10.4 a.k.a. Leopard." Psystar claims its product "is ready to run out of the box when you purchase it with Leopard included. If you buy Leopard with your Open Computer we'll install it for free." Psystar also says "The Open Computer can now be purchased with Leopard included and installed" (emphasis in original), the OpenPro is ready to run "right out of the box" with "Mac OS X Leopard 10.5 preinstalled" and that OpenServ computers run "Mac OS X Leopard Server."

24. Apple has never authorized Psystar to install, use, or sell the Mac OS software on any non-Apple-labeled hardware.

27. Defendant has created derivative works from, reproduced, distributed and/or displayed
the Copyrighted Works in violation of Apple's exclusive rights under the Copyright Act. Apple has
not licensed or otherwise authorized Defendant's creation of derivative works from, reproduction,
distribution or display of the Copyrighted Works.

28. Apple is informed and believes, and on that basis alleges, that Defendant's infringement
of Apple's copyrights in the Copyrighted Works is, and continues to be, intentional, willful and in
conscious disregard of Apple's rights.

29. Apple is informed and believes, and on that basis alleges, that Defendant has realized
profit by virtue of its infringement of Apple's copyrights.

30. Apple has sustained economic damage as a result of Defendant's infringement of
Apple's copyrights in an amount to be proven at trial.

31. Apple is entitled to recover the actual damages it has suffered and/or any profits gained
by Defendant that are attributable to its acts of copyright infringement pursuant to 17 U.S.C. § 504(b).
Alternatively, Apple is entitled to the maximum statutory damages allowed under 17 U.S.C. § 504(c)
based on Defendant's willful acts of copyright infringement. Apple will make its election at the
appropriate time before final judgment is rendered.

34. Plaintiff incorporates herein by reference each and every allegation in the preceding
paragraphs.

35. Defendant is aware that its actions as described above infringed and continue to
infringe Apple's copyrights and exclusive rights to create derivative works from, reproduce, display
and distribute Apple's copyrighted materials.

36. By offering for sale copies of Apple software to actual and potential purchasers for use
on non-Apple-labeled computers, and by providing services to install, update, and/or modify Apple
software to cause it to operate on non-Apple-labeled computers, Defendant has induced, caused or
materially contributed to the infringing conduct of purchasers.

37. Apple is informed and believes, and on that basis alleges, that Defendant's inducement
of infringement of Apple's copyrights in the Copyrighted Works is, and continues to be, intentional,
willful and in conscious disregard of Apple's rights.

38. Apple is informed and believes, and on that basis alleges, that Defendant has realized
profit by virtue of its inducement of infringement of Apple's copyrights.

39. Apple has sustained economic damage as a result of Defendant's inducement of
infringement of Apple's copyrights in an amount to be proven at trial.

40. Apple is entitled to recover the actual damages it has suffered and/or any profits gained
by Defendant that are attributable to its acts of copyright infringement pursuant to 17 U.S.C. § 504(b).
Alternatively, Apple is entitled to the maximum statutory damages allowed under 17 U.S.C. § 504(c)
based on Defendant's willful acts of copyright infringement. Apple will make its election at the
appropriate time before final judgment is rendered.

46. Defendant has admitted that Apple's Mac OS X normally "will not operate on anything
other than Apple-labeled computer hardware" but that Defendant has "developed [its] own code that
allows it to operate on a non-Apple-labeled computer system" and that such code overrides or gets
around Apple's embedded codes.

47. Apple is informed and believes, and on that basis alleges, that Defendant's "code" is
used to circumvent a technological protection measure since it avoids, bypasses, removes,
descrambles, decrypts, deactivates, or impairs a technological protection measure without Apple's
authority for the purpose of gaining unauthorized access to Apple's Copyrighted Works.

48. Apple is informed and believes, and on that basis alleges, that Defendant has
manufactured, imported, offered to the public, provided or otherwise trafficked a product, device,
component, technology, software, or "code" ("the Circumvention Devices") that are primarily
designed or produced for the purpose of either circumventing Apple's technological protection
measures that effectively control access to Copyrighted Works, or allowing third parties to access
Apple's Copyrighted Works without authorization.

49. Apple is informed and believes that that the Circumvention Devices have only limited
commercially significant purpose or use other than to circumvent a technological protection measure
that effectively controls access to Copyrighted Works, or are marketed by Defendant for use in

50. Apple is informed and believes, and on that basis alleges, that Defendant has realized
profit by virtue of its circumvention of Apple's technological protection measure and trafficking in
circumvention devices.

51. Apple has sustained economic damage as a result of Defendant's circumvention of
technological protection measures and trafficking in the Circumvention Devices in an amount to be
proven at trial.

52. Apple is entitled to recover the actual damages it has suffered and/or any profits gained
by Defendant that are attributable to its circumvention of access controls and trafficking in the
Circumvention Devices pursuant to 17 U.S.C. § 1203(c)(1). Alternatively, Apple is entitled to the
maximum statutory damages allowed under 17 U.S.C. § 1203(c)(2). Apple will make its election at
the appropriate time before final judgment is rendered.

53. Pursuant to 17 U.S.C. § 1203(b), Apple is entitled to an injunction against Defendant's
continuing circumvention of access controls and trafficking in the Circumvention Devices.

54. Apple is further entitled to recover its full costs and reasonable attorneys' fees pursuant
to 17 U.S.C. § 1203(b).

FOURTH CLAIM FOR RELIEF
(Breach of Contract)

55. Plaintiff incorporates herein by reference each and every allegation in the preceding
paragraphs.

56. Apple is informed and believes, and on that basis alleges, that Psystar has acquired
Mac OS X version 10.5 software, that Psystar opened the box in which the software disk and license
were packaged, opened the seal on the shrink-wrapped software disk, and thereafter installed the
Leopard operating system and/or Leopard Server software on computers. By so doing Psystar
accepted the terms and conditions of the applicable License Agreement.

G. Redistributing Mac OS X software in a form in which the software or portions
of it have been modified or replaced;

H. Transferring copies of Mac OS X and updates thereto separately;

I. Continuing to use and failing to destroy all copies, full or partial, of the
software, after termination of the Software Licenses Agreement for Mac OS X upon automatic
termination without notice as a result of the breaches described in A-H above.

58. On information and belief, Apple alleges that Psystar has engaged in other and further
actions that violate the License Agreement.

59. As a direct and proximate cause of Psystar's breach of the License Agreement Apple
has suffered economic injury and damages in an amount to be proven at trial in excess of $75,000.

FIFTH CLAIM FOR RELIEF
(Inducing Breach of Contract)

60. Plaintiff incorporates herein by reference each and every allegation in the preceding
paragraphs.

61. The owners and managers of Psystar have admitted in public statements their
knowledge of the existence of the License Agreement governing the use of Mac OS X software and of
its terms and conditions.

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62. Apple is informed and believes, and on that basis alleges, that notwithstanding its
knowledge of the existence and terms of the License Agreement, Psystar has advised, encouraged and
assisted others to breach the License Agreement by, among other things, encouraging those consumers
to acquire Mac OS X software and then assisting them to install, use and run it on non-Apple-labeled
computers. In so doing Psystar has unlawfully induced breach of the License Agreement by others.

63. As a direct and proximate result of Psystar's actions to induce others to breach the
License Agreement, Apple has suffered economic injury and damages in an amount to be proven at
trial in excess of $75,000. Apple further seeks punitive damages and injunctive relief as a result of
Psystar's inducement of others to breach Apple's License Agreement.

SIXTH CLAIM FOR RELIEF
(Trademark Infringement)
(15 U.S.C. § 1114)

64. Plaintiff incorporates herein by reference each and every allegation in the preceding
paragraphs.

66. Apple never consented to Psystar's use of Apple's Infringed Marks.

67. Prior to Psystar's first use of the Infringed Marks, Psystar was aware of Apple's
business and had either actual notice and knowledge, or constructive notice of Apple's ownership and
registrations of the Infringed Marks.

68. Defendant's unauthorized use of Apple's trademarks is likely, if not certain, to deceive
or to cause confusion or mistake among consumers as to the origin, sponsorship or approval of the
software and computers and/or to cause confusion or mistake as to any affiliation, connection or
association between Apple and Psystar, in violation of 15 U.S.C. §§ 1114(a).

69. Apple is informed and believes, and on that basis alleges that Psystar's infringement of

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Apple's trademarks has been and continues to be intentional, willful and without regard to Apple's
trademark rights.

70. Apple is informed and believes and on that basis alleges that Psystar has gained profits
by virtue of its infringement of Apple's trademarks.

71. Apple also has sustained damages as a direct and proximate result of Psystar's
infringement of Apple's trademarks in an amount to be proven at trial.

72. Apple will suffer and is suffering irreparable harm from Psystar's infringement of the
Apple trademarks insofar as Apple's invaluable good will is being eroded by Defendant's continuing
infringement. Apple has no adequate remedy at law to compensate it for the loss of business
reputation, customers, market position, confusion of potential customers and good will flowing from
Psystar's infringing activities. Pursuant to 15 U.S.C. § 1116, Apple is entitled to an injunction against
Defendant's continuing infringement of Apple's trademarks. Unless enjoined, Defendant will continue
its infringing conduct.

73. Because Psystar's actions have been committed with intent to damage Apple and to
confuse and deceive the public, Apple is entitled to treble its actual damages or Defendant's profits,
whichever is greater, and to an award of costs and, this being an exceptional case, reasonable
attorneys' fees pursuant to 15 U.S.C. § 1117(a) and 1117(b). Alternatively, Apple is entitled to the
maximum statutory damages allowed under 15 U.S.C. § 1117(c). Apple will make its election at the
appropriate time before final judgment.

74. Plaintiff incorporates herein by reference each and every allegation of the preceding
paragraphs.

75. Through Plaintiff's use in interstate commerce, Apple also owns common law
trademark rights throughout the United States in unregistered trademarks and other source identifiers
in and in connection with the Mac and its OS X Leopard software.

76. Apple never consented to Psystar's use of Apple's various marks or its distinctive trade
dress.

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77. Apple is informed and believes, and on that basis alleges that Defendant chose to use
the name Open Mac, Apple's various other trademarks and its distinctive trade dress, to cause
confusion or mistake, or to deceive the public as to the origin, sponsorship, association or approval of
the goods and services of Defendant and/or to falsely imply an association with Apple.

78. Defendant's unauthorized use of Apple's trademarks and its distinctive trade dress is
likely, if not certain, to cause confusion or to deceive customers as to the affiliation, connection or
association of Psystar with Apple.

79. Defendant's unauthorized use of the Apple's various trademarks and its distinctive trade
dress is also likely, if not certain, to cause confusion or to deceive customers as to the origin,
sponsorship, association or approval of the goods and services of the Defendant.

80. Defendant's unauthorized use of Apple's various trademarks and its distinctive trade
dress also facilitates the acceptance of Defendant's computers and related services not based on the
quality of the goods and services provided by Defendant, but on the association that the public is
likely to make with Apple and the reputation for outstanding quality and goodwill associated with
Apple's goods and services.

81. Defendant's conduct deprives Apple of the ability to control the quality of the goods
and services marketed under the Infringed Marks and Apple's unregistered common law trademarks
and, instead, places Apple's valuable reputation and goodwill into the hands of Defendant, over which
Apple has no control.

82. Apple is informed and believes, and on that basis alleges, that Psystar's infringement of
Apple's trademarks has been and continues to be intentional, willful and without regard to Apple's
trademark rights.

83. Apple is informed and believes, and on that basis alleges, that Psystar has gained
profits by virtue of its infringement of Apple's trademarks.

84. Apple also has sustained damages as a direct and proximate result of Psystar's
infringement of Apple's trademarks in an amount to be proven at trial.

85. Apple will suffer and is suffering irreparable harm from Psystar's infringement of the
Apple trademarks insofar as Apple's invaluable good will is being eroded by Defendant's continuing

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infringement. Apple has no adequate remedy at law to compensate it for the loss of business
reputation, customers, market position, confusion of potential customers and good will flowing from
Psystar's infringing activities. Pursuant to 15 U.S.C. § 1116, Apple is entitled to an injunction against
Defendant's continuing infringement of Apple's trademarks. Unless enjoined, Defendant will continue
its infringing conduct.

86. Because Psystar's actions have been committed with intent to damage Apple and to
confuse and deceive the public, Apple is entitled to treble its actual damages or Defendant's profits,
whichever is greater, and to an award of costs and, this being an exceptional case, reasonable
attorneys' fees pursuant to 15 U.S.C. § 1117(a) and 1117(b). Alternatively, Apple is entitled to the
maximum statutory damages allowed under 15 U.S.C. § 1117(c). Apple will make its election at the
appropriate time before final judgment.

87. Plaintiff incorporates herein by reference each and every allegation of the preceding
paragraphs.

88. Apple is the owner of common law rights throughout the United States in Apple's
Trade Dress through their use and promotion in interstate commerce.

89. Apple's Trade Dress has been prominently displayed in the Mac OS X Leopard, is well-known among consumers and has come to be associated exclusively with Apple and the Leopard
version of the Mac OS X.

90. Apple's Trade Dress has become distinctive of Apple's Mac OS X Leopard operating
system, and distinguishes Apple's goods and services from those offered by others.

91. Apple's Trade Dress was distinctive long before Defendant began offering its product
for sale.

92. Apple's Trade Dress is non-functional.

93. Defendant's unauthorized use, sale and distribution of goods displaying Apple's Trade
Dress is likely to cause confusion, to cause mistake, or to deceive as to the source of goods and
services provided by Defendant, or as to affiliation, connection, association, sponsorship, or approval

95. Apple is informed and believes, and on that basis alleges, that Psystar's infringement of
Apple's Trade Dress has been and continues to be intentional, willful and without regard to Apple's
trademark rights.

96. Apple is informed and believes, and on that basis alleges, that Psystar has gained
profits by virtue of its infringement of Apple's Trade Dress.

97. Apple also has sustained damages as a direct and proximate result of Psystar's
infringement of Apple's Trade Dress in an amount to be proven at trial.

99. Because Psystar's actions have been committed with intent to damage Apple and to
confuse and deceive the public, Apple is entitled to treble its actual damages or Defendant's profits,
whichever is greater, and to an award of costs and, this being an exceptional case, reasonable
attorneys' fees pursuant to 15 U.S.C. § 1117(a) and 1117(b). Alternatively, Apple is entitled to the
maximum statutory damages allowed under 15 U.S.C. § 1117(c). Apple will make its election at the
appropriate time before final judgment.

NINTH CLAIM FOR RELIEF
(Trademark Dilution)
(15 U.S.C. § 1125(c))

100. Plaintiff incorporates herein by reference each and every allegation of the preceding
paragraphs.

101. Apple possesses exclusive trademark rights associated with the Apple, Mac, and
Mac OS X trademarks as well as other source identifiers found in the Mac OS X software. The Apple,
Mac and Mac OS trademarks are famous in the United States and all were famous prior to the
commencement of Psystar's infringing activities.

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102. By its conduct, Psystar has diluted Apple's marks in violation of 15 U.S.C. § 1125(c).

103. Psystar willfully intends and intended to trade on Apple's reputation for excellence.

104. Apple will suffer and is suffering irreparable harm from Psystar's dilution of the Apple
trademarks.

105. Pursuant to 15 U.S.C. § 1116, Apple is entitled to an injunction against Defendant's
continuing infringement of Apple's trademarks.

106. Because Psystar's actions have been committed with intent to damage Apple and to
confuse and deceive the public, Apple is entitled to treble its actual damages or Defendant's profits,
whichever is greater, and to an award of costs and, this being an exceptional case, reasonable
attorneys' fees pursuant to 15 U.S.C. § 1117(a) and 1117(b). Alternatively, Apple is entitled to the
maximum statutory damages allowed under 15 U.S.C. § 1117(c). Apple will make its election at the
appropriate time before final judgment.

107. Plaintiff incorporates herein by reference each and every allegation of the preceding
paragraphs.

108. Psystar's business practices as alleged above constitute unfair competition and unfair
business practices and business acts in violation of Section 17200 et seq. of the California Business &
Professions Code.

109. Pursuant to California Business and Professions Code §17203, Apple is entitled to
enjoin these practices. Without injunctive relief, Apple has no means by which to control Psystar's
unlawful copying and distribution of Apple's copyrighted works. Similarly, Apple has no way to
control the confusion created by Psystar's infringement of Apple's trademarks. Apple is therefore
entitled to injunctive relief prohibiting Psystar from continuing such acts of unfair competition
pursuant to California Business and Professions Code §17203.

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ELEVENTH CLAIM FOR RELIEF
(Common Law Unfair Competition)

110. Plaintiff incorporates herein by reference each and every allegation of the preceding
paragraphs.

111. Psystar's business practices as alleged above constitute unfair competition and unfair
business practices under state common law. As a direct and proximate result of Psystar's infringing
conduct, Apple has suffered and will continue to suffer lost sales and profits in an amount not yet fully
ascertained in an amount to be proven at trial. In addition, Apple has suffered and continues to suffer
injury to its business reputation and goodwill for which no adequate remedy exists at law and for
which Apple is entitled to injunctive relief.

PRAYER FOR RELIEF

WHEREFORE, in consideration of the foregoing, Plaintiff prays for judgment as follows:

2. Awarding Apple a preliminary and/or permanent injunction against the sale or
distribution of any software or device, including but not limited to the Psystar Open Computer,
OpenPro computer, and OpenServ server products, that allows for the installation or running of Apple
software on non-Apple computers, and requiring Psystar to recall all such products and software sold
or distributed to the public as a result of Psystar's infringement of Apple's copyrights;

3. Awarding Apple actual damages and/or any profits gained by defendants and/or
statutory damages for circumvention of an access control measure and/or trafficking in circumvention
devices as determined at trial;

4. Awarding Apple a preliminary and/or permanent injunction against the sale or
distribution of any software or device, including but not limited to the Psystar Open Computer,
OpenPro computer, and OpenServ server products, that allows forn the installation or running of
Apple Software on non-Apple computers, and requiring Psystar to recall all such products and
software sold or distributed to the public as a result of Psystar's circumvention of an access control
measure and/or trafficking in circumvention devices;

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5. Awarding damages as a result of Psystar's breach of Apple's Software License
Agreement for Mac OS X and Mac OS X Server;

6. Awarding damages, including punitive damages, as a result of Psystar's inducement of
others to breach Apple's Software License Agreement for Mac OS X and Mac OS X Server;

10. Awarding Apple a preliminary and/or permanent injunction against sales of the Psystar
Open Computer, OpenPro computer, and OpenServ server products with Apple software and requiring
Psystar to recall all such products sold to the public as a result of Psystar's infringement of Apple's
trademarks and trade dress;

11. Awarding Apple a preliminary and/or permanent injunction against sales of the Psystar
Open Computer, OpenPro computer, and OpenServ server products with Apple software and
requiring Psystar to recall all such products sold to the public as a result of Psystar's dilution of
Apple's trademarks;

12. Awarding Apple a preliminary and/or permanent injunction against sales of the Psystar
Open Computer, OpenPro computer, and OpenServ server products with Apple software and
requiring Psystar to recall all such products sold to the public as a result of its statutory and common
law unfair competition;

13. Ordering Apple actual damages as a result of Psystar's common law unfair competition;

14. Awarding Apple treble damages for Psystar's willful acts;

15. Awarding Apple its reasonable attorneys' fees and costs; and

16. Awarding Apple such other relief as the Court deems appropriate.

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DEMAND FOR JURY TRIAL

Plaintiff Apple Inc. hereby demands a trial by jury of all issues triable by jury pursuant to
Federal Rule of Civil Procedure 38(b) and Civil Local Rule 3-6(a).